Issuers and investors in the securities market are divided on what exactly should be done with the qualified mortgage “patch.”

If the U.S. economy enters a recession, MBS and ABS are expected to perform relatively well, according to S&P. Subprime auto ABS, certain commercial MBS and CLOs are most at risk for downgrades.

Switching from LIBOR to another reference rate looks to be difficult for vintage non-agency MBS. Adopting a replacement rate will require significant communication and cooperation among investors.